60/40 Systematic
Maximize Your Investments by adjusting to market risk
Market Risk can undermine the performance of your investment portfolio
60/40 Systematic is a coincident stock market risk indicator aiding you to manage market risk
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Investing your own money can be challenging
Managing your own investment portfolio can be a complex task, as private investors often face challenges such as lack of expertise and knowledge, emotional bias, inadequate risk management, and difficulty in adhering to a long-term strategy.
Research has shown that many investors tend to make emotional decisions when the markets are in a downturn, which can result in them selling a portion or all of their investments when the market is at its lowest, leading to significant financial losses.
Navigating the challenges
Managing market risk effectively is possible despite the difficulty of navigating investment portfolio challenges and predicting markets.
60/40 Systematic help you effectively identify and manage market risk, increasing your chances of successful investment outcome.
How it works
60/40 Systematic utilizes advanced macroeconomic and market stress indicators in its algorithm, enabling the App objectively assess potential risks and opportunities in the market, allowing you to make optimal adjustments to your stock-bond ratio in your portfolio.
revitalizing the classic 60/40 portfolio
The Classic 60/40 Portfolio
The classic 60/40 portfolio is an investment portfolio that is split between stocks and bonds in a 60:40 ratio. A 60/40 portfolio is often recommended for investors who are seeking a combination of growth potential and income and are willing to take on some market risk in order to potentially earn higher returns.
Downsides of the Classic 60/40 Portfolio
The classic 60/40 portfolio is a popular investment strategy, but there are some downsides to highlight.
A classic 60/40 portfolio may:
- Underperform a portfolio with a higher proportion of stocks in normal market conditions.
- Not allow for as much flexibility as other investment strategies, as it is based on a fixed asset allocation.
- Not provide enough protection in a severe market downturn.
Introducing objektive risk management
60/40 Systematic uses a risk gauge that ranges from 1 to 12 to provide an objective assessment of stock market risk, and to indicate when adjustments to the stock-bond ratio in the portfolio are necessary for optimal investment performance.
The risk gauge is color-coded with green indicating low market risk, yellow indicating medium market risk, and red indicating high market risk.
60/40 Systematic allows you to set the stock-bond ratio according to your desired level of risk in different market risk environments for you to follow, for instance: 75/25 for low risk, 60/40 for medium risk, and 30/70 for high risk.
adjusting stock-bond ratio to reflect changes in market risk
Low Risk - Green
Medium Risk - Yellow
Medium Risk - Yellow
Increase Portfolio Risk
Stock-Bond ratio -
75% stocks and 25% bonds
Medium Risk - Yellow
Medium Risk - Yellow
Medium Risk - Yellow
Neutralize Portfolio Risk
Stock-Bond ratio -
60% stocks and 40% bonds
High Risk - Red
Medium Risk - Yellow
High Risk - Red
Reduce Portfolio Risk
Stock-Bond ratio -
30% stocks and 70% bonds
60/40 Systematic APP
Risk Level
The 60/40 SYSTEMATIC's “Risk Level” gauge measure Low (Green), Medium (Yellow) and High (Red) Market Risk.
60/40 SYSTEMATIC's quant algorithm is an objective and mathematical model based on macro-economic and financial market stress indicators. The model has an extremely high confidence level over the medium to long-term.
Portfolio
In the App, the Portfolio displays the outcome of having a 75/25 (stock/bonds) allocation when the App's Risk Level is set to Green, a 60/40 allocation when it is set to Yellow, and a 30/70 allocation when it is set to Red. This is in contrast to the Benchmark, which has a constant 60/40 allocation.
In some periods, the Benchmark may outstrip the Strategy in terms of absolute return, although this comes with a much higher risk.
Drawdown
A drawdown is a peak-to-trough decline during a specific period.
In the App, the Drawdown feature displays the Portfolio's performance compared to the Benchmark in terms of drawdown reduction.
The key to maximizing returns is reducing drawdowns.
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